UPDATE: These people are retiring early -- but they're not worried by the volatile markets

Even those aspiring to 'financial independence' say they're playing the long game

Gwen Merz is retiring from her full-time job at the end of March, at the age of just 27. But she's still not worried about volatility in the stock market this week. "I had no idea the market was even going down until people in the Facebook (FB) groups I'm part of were saying, 'There's a drop, but it's going to be OK,'" she said. "I really, truly don't pay attention. It's better for my mental health."

Merz works in IT for executives of a Fortune 100 Company, but she has been aggressively saving so that she can work only on her own terms in the future. She lives in Iowa and plans to move to join her boyfriend in Minnesota in April.

To reach those goals, she has been maxing out her retirement accounts -- a 401(k), a health savings account (HSA) and a Roth IRA -- and she purchased a rental property in Iowa that earns her more than $1,000 a month. She also hosts a podcast she hopes to monetize, and she sells stained glass that she creates herself. She writes about her experiences on a blog, Fiery Millennials (https://www.fierymillennials.com/).

That's why a drop in the market makes her nervous, but isn't a disaster, she said. "I have a long time frame, and I don't need the money right now."

Don't miss:Some millennials wonder whether it's finally time to take the plunge into stocks (http://www.marketwatch.com/story/after-the-dow-fell-1000-points-millennials-wonder-whether-its-finally-time-to-take-the-plunge-2018-02-09)

Merz isn't alone. There are others like her, trying to achieve "financial independence" at early ages, following in the footsteps of financial gurus like the personal-finance blogger "Mr. Money Mustache." (http://www.marketwatch.com/story/5-secrets-mr-money-mustache-learned-from-retiring-at-30-2017-04-19)

Despite their aggressive investing techniques, they say the market volatility in the past week -- the Dow Jones Industrial Average recently fell 10% from last month's all-time high (http://www.marketwatch.com/story/the-dows-down-10-its-time-for-some-buying-says-longtime-bear-doug-kass-2018-02-09) -- isn't keeping them up at night.

That approach might even be good for their health. Large declines in the S&P 500 have been tied to hospital admissions (http://www.marketwatch.com/story/how-trading-bitcoin-could-actually-ruin-your-mental-health-2018-01-18), particularly for anxiety, panic disorders or major depression.

Here are their tips:

Automate everything

Jordan Graen, a 27-year-old in the Minneapolis area with tentative plans to retire early, said automating his investing is one of his most important strategies. That's why even during market volatility, he doesn't change his behavior.

Every Friday, money is pulled from his checking account into the robo adviser Wealthfront, where he keeps his investments. "There's no thinking about it, it's already done," he said. "Automated investing is hugely important in not letting your emotions get in the way."

Carl Jensen, 44, who blogs about his early retirement at a blog called 1500 Days to Freedom (https://www.1500days.com/start-here/), said he invests "at the first chance I get," and that won't change. "I don't really care what the market is doing, if it's high or low," he said. Rather, he "frontloads" his 401(k) and puts in as much as he can, as early as possible in the year.

Graen and Jensen are likely right to keep staying the course. "Don't be scared and don't be impulsive (http://www.marketwatch.com/story/the-stock-market-is-plunging-heres-what-advisers-say-you-should-do-2018-02-05)," said Kristina Hooper, chief global market strategist at Invesco. "Be disciplined no matter what the market environment, and keep saving and investing according to your long-term plan."

Have enough cash

Merz invests a large portion of her income, but has also been "hoarding" cash, she said, to be sure she has enough to live when she quits her full-time job. At the beginning of 2018, she had $126,000 saved in her 401(k), $28,000 in a Roth IRA and $9,700 in an HSA, but she still saved $15,000 in cash.

Cash is also key to Jensen's sanity, he said. "Having that cash allows me to ride out those down periods."

For investors whose financial goal is retirement, Erik Davidson, the chief investment officer for Wells Fargo Bank, previously told MarketWatch he recommends subtracting one's age from 100 (http://www.marketwatch.com/story/investors-still-want-to-keep-their-money-in-cash-2016-07-21) to determine how much of one's portfolio should be in less risky assets, such as cash and bonds. At age 25, investors should have about 25% of their investments in those less-risky options and the rest in stocks. At 50, the proportion should be closer to half and half.

That number can change, though, for investors who hope to retire early.

Tanja Hester, 37, who retired with her husband Mark (https://ournextlife.com/) in December, said the bulk of their current wealth is in investments. But they also followed the advice often given to later retirees: Save two to three years of expenses in cash before actually retiring."When you're new in retirement, seeing more volatility can be nerve-wracking," she said. "But anyone who is freaked out about it doesn't have a solid enough plan."

Focus on the long term

Graen, who hopes to retire early, said he tries to focus on the longer-term gains, rather than be upset by small fluctuations in the market. Any small changes now pale in comparison to how much his investments will compound for the next several decades, when he will actually need them, he said.

He recently checked his Wealthfront account, and even though he lost about $6,000 in the last week, his balances are still up about $20,000 for the past year, he said. He tries to keep that in mind while keeping his day-to-day spending in check. "Every dollar I don't spend today can be worth so much more in the future."

Hester said she only looks at her investment account balances on the last day of each month. "I don't know where we are today," she said. "It doesn't matter."

-Maria LaMagna; 415-439-6400; AskNewswires@dowjones.com

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